Morneau Shepell​ sees no impact from pension legislation

Reuters Staff

3 Min Read

OTTAWA (Reuters) - Morneau Shepell Inc (MSI.TO), the human resources management company at the heart of conflict-of-interest allegations against Canadian Finance Minister Bill Morneau, said on Friday it would not benefit from pension or tax legislation proposed by the Liberal government.

Canadian Prime Minister Justin Trudeau’s government has been badly shaken by the conflict-of-interest controversy about his finance minister, who is the multimillionaire former chief executive officer of Morneau Shepell. Some have questioned whether Morneau, whose father founded Morneau Shepell, would be forced to resign.

Morneau Shepell, a major provider of pension administration services to private companies and government agencies, said it is not involved in the consultation for either changes to the small business tax code or to the pension reform.

“If passed, (the pension reform) would allow federally regulated pension plans the option to implement target benefit pension plans. They would not be required to do this,” the company said in a statement.

“Several provinces have already enacted similar enabling legislation for pension plans that they regulate, but in practice, very few employers have adopted it,” Morneau Shepell said.

The company said it severed all contact with Morneau upon his election to the House of Commons in October 2015. Morneau resigned as executive chairman of Morneau Shepell shortly after his election.

Morneau, who was named finance minister shortly after his election to Parliament, said last week he would put his assets in a blind trust and divest his stockholding in the family business in response to criticism that his proposals for pension or tax reform could benefit his company and his personal finances.

On Thursday, Morneau said he will donate to charity any profit that his Morneau Shepell shares have made since he was elected.

The company’s stock, currently trading at C$21.17, closed at C$15.77 in the session before the election, which would put the potential profit for the 1 million shares Morneau has said he holds at C$5.4 million.

Morneau told reporters on Thursday he did not know what the difference in the value of the shares will be.

Opposition parties from both the political left and right have seized on the ethics scandal, trying to tie Trudeau’s team to what they say is an entitled Liberal Party that has previously faced corruption charges.